considered to be is incorrect usage here - just "considered" is fine

Excellent explanation!! Please continue to contribute on GmatClub

Agree with supercat and nice explanation as well!

I have seen in many renowned books, including Kaplan non-GMAT related material, sentences with "considered to be" and I told myself that in GMAT world, this is wrong. Just stick to "X is considered Y" and you will nail it.
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Best Regards,

Paul

Please do share your verbal notes particularly on SC....Boy you are awesome

Business loans were considered to be more useful to recipient businesses than was management and technical assistance.

Saurabh, that's an example of how tricky the GMAT can be. I have in fact seen examples of the ETS editorial staff violating its own S/C rules in the Official Guide, etc.

Please understand that what we're talking about here -- with "considered to be" and other such idioms -- are very subtle "rules" regarding effective style.

No doubt the passage was written by some author who had no problem with saying "considered to be," and ETS didn't think of editing it out before putting it in a test. From this I gather that in the halls of ETS, the staff who work on RC questions are not the same people as those who create S/C questions.

"Considered to be" is NOT grammatically incorrect, and native english speakers do use that phrase all the time. You hear it on TV and read it in articles. Some very similar phrases would actually require the "to be", or else would sound awkward. For example:

The loans were believed to be more useful...
The loans were thought to be more useful...
The loans were expected to be more useful...
--BUT--
The loans were considered more useful

The first three sentences are fine in my judgement; with "considered" the sentence is almost exactly the same, but due to the vagueries of style, it's preferred we don't use "to be". By that I mean that, most of the authorities on usage and style would agree you should just use "considered".

English isn't physics or math. It wasn't planned out and its rules are often violated. A bunch of illiterate medieval barbarians mutated a language for themselves, and eventially grammarians began to take snapshots of it to see how it worked and what general rules seemed to apply most of the time. Authorities on style and grammar have been trying to keep people in line ever since.

All that being said, I think that S/C questions seldom hinge on just a subtle variation in idiom. ETS doesn't want to screw up and be proven wrong. For example, you won't see a SC question that depends on whether or not to split an infinitive. Many people absolutely insist that you should never split an infinitive; other authorities say it's OK, which allows you to say cool things like "to boldly go where no man has gone before." That's controversial, and ETS wouldn't test it (that I've ever seen).

Nearly always, there's some other major clue to the correct answer. Certainly, you wouldn't see more than maybe one hard SC question per test that would depend on something so subtle.

Hope that helps
Supercat